BAUCE

It’s Time To Stop Sleeping On Your Credit Score, Sis – Here’s Why

In a country
where financial literacy is not required for post-secondary students, it is not
hard to understand why so many American students are currently struggling with
money management and wealth generation in our early adult years. Even aspects
around some of the simplest facets of personal finance, such as one’s credit
score, are a mystery for many until they leave college or start looking into
purchasing a home. Although it may seem trivial, your credit score is actually
a key financial asset that can impact you in a variety of ways. A credit score
is a three-digit number that relates to how likely you are to repay debt. Banks
and lenders use your credit score to determine or not they can loan you money
to purchase an item. According to Credit Karma, these are the key items that are analyzed in order to
determine your credit score:

Many people have
made poor choices when it comes to their creditworthiness. Some of you may be
in situations where you signed up for a college credit card thinking it was
free money until collection agencies started calling. Some of you may have just
“forgotten” to make some payments because you didn’t update your mailing
address so you had no idea bills were being sent to you. Whatever the issue is,
having a low credit score (anything below 620 points) is not cute because it
could prevent you from building the life you truly want from a financial
perspective. Keep reading to find out why getting your act together with your
credit score is critical right now.

You need credit to live on your own

Once you’re ready to move out from your parent’s house
(thanks for all the free meals mom!), you’re going to have to prove to someone
else, whether it be a private owner, leasing company or a mortgage broker, that
you are financially responsible enough to keep a roof over your head and get
your payments in on time. That financial responsibility is based on how much
money you currently make, how many financial assets you currently have, and
your credit score. Without a healthy credit score, homeowners and management
companies will either require a hefty amount of money upfront or be very
untrusting about renting to you because they may think that you won’t pay on
time, meaning that they lose or get very little return on their investment.

Let’s say
you have a derogatory item on your credit report that’s dragging down your credit score.
You could now easily dispute it on your own as a ScoreShuttle user. Their credit enhancing DIY software provides you with the
tools you need to improve your scores on your own. Whether you need a better
credit score to qualify for a personal loan, mortgages, or for financing a new
car, ScoreShuttle has the right tools.

Your creditworthiness can impact things that are not financial

Your credit score is not only just important for getting a
loan or a credit card; it can impact you in ways that are not financially
related as well. Some employers also review credit history or perform credit
checks to perceive what type of individual you are when it comes to your
ability to execute on a project. If you are someone who has a lot of missed
payments on your record or delinquent actions, they may interpret this behavior
as you being someone who could miss deadlines or not perform well at work. This is especially key for jobs that are
high-stakes and deal with money such as banking or government roles.

Another way that your credit score could impact you is when
it comes to your relationships. Although strangers don’t have access to your
credit history, the closer you get to people that you date the more you will be
sharing about yourself to them, including your financial background. How you
manage your money (or the lack thereof) could strongly impact your
relationship, as your partner may consider you not to be financially reliable
when it comes to building a family or managing day-to-day life together. Having
a strong credit score proves to your partner that you don’t let things fall to
the wayside and that you are prioritizing your financial future, which is
critical given that finances are one of the number one things that lead to
divorce.

Having bad credit has a domino effect

Improving your credit score doesn’t simply happen overnight;
it does take time and requires diligence and patience. However, not taking
action on improving your credit score can have a severe domino effect in your
life or to the lives around you. If your credit score is bad and you end up in
a situation where you need money urgently (such as for healthcare or a family
emergency) it can become super hard to get a loan. You may find yourself in a
situation where you are getting charged large amounts of interest or APR
because lenders don’t think you will repay the borrowed money on time or ever
at all. This could lead to you asking friends and family for money and creating
tension if you aren’t sure or able to pay them back in a respectable timeframe.
Poor credit can also block you from being able to get a decent car or to live
in a safe neighborhood. It could also prevent you from just getting ahead in
life overall just because you are unable to dig yourself out of a huge
financial hole because you’re constantly living paycheck to paycheck because of
bills.

Now is the time to snap into action when it comes to your financial health. To get more tips on how to boost your earnings, check out more posts in our earn section.

BAUCE is a lifestyle site for self-made women. We create and curate content that helps ambitious women from multicultural backgrounds build their empires, achieve financial freedom, and look good while doing it. We’re not just a publication. Being a BAUCE is a lifestyle.